In their latest economic projections, released in December, 17 Fed officials pegged the longer-run U.S. unemployment rate somewhere in the range of 5% to 5.8%. The so-called central tendency of the range–removing the three highest and the three lowest estimates–was 5.2% to 5.5%.

That’s a significant threshold because it represents what many economists call the nonaccelerating inflation rate of unemployment, or Nairu. The Fed could try to push the unemployment rate lower, but in theory that would stoke inflation–and the U.S. central bank’s mandate is to pursue both “maximum employment” and “stable prices.”

So does that mean the Fed considers its work done on the labor front? Maybe not. As the Journal’s Jon Hilsenrathwrote last month, some Fed officials are thinking about revising down their estimates for long-run unemployment. After all, the jobless rate has fallen sharply with little sign of mounting price or wage pressures.

Fed Chairwoman Janet Yellentold lawmakers last month that while the labor market has seen improvement, “too many Americans remain unemployed or underemployed, wage growth is still sluggish and inflation remains well below our longer-run objective.” That didn’t exactly sound like a description of an economy operating at full employment.

We’ll find out more on March 18, when Fed officials release updated economic projections – including new estimates for the long-run unemployment rate.

22% of American children, or more than 16 million kids, were living in poverty as of 2013, according to the report. Before the recession, in 2008, 18% of children lived in poverty.
Nearly a third of children in 2013 lived in a household where noparent had a steady, full-time job, according to the report, which was released Tuesday. That statistic is also higher than pre-recession levels, when 27% of children lived in households without job security.

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For the first time since February 2008, Indiana has a sub-5 percent unemployment rate.

The state’s jobless rate in June fell to 4.9 percent, as the labor force added 2,200 jobs, the state said Tuesday. It marked a 0.2 percent decline from May and the third month in a row where the jobless rate has fallen significantly.

A jobless rate under 5 percent is typically considered full employment, given the normal attrition and job switching among workers.

US economy nearing full employment, bounced back in second quarter: Fed's Fischer The U.S. economy probably bounced back to an annual growth rate of around 2.5 percent in the second quarter, and the labor market is approaching full employment, Federal Reserve vice chairman Stanley Fischer said on Tuesday.

People browse booths at a military veterans' job fair in Carson, California October 3, 2014. REUTERS/Lucy Nicholson

WASHINGTON: The U.S. economy probably bounced back to an annual growth rate of around 2.5 percent in the second quarter, and the labor market is approaching full employment, Federal Reserve vice chairman Stanley Fischer said on Tuesday.

He said "tentative" signs of wage growth and continued job creation also gave him confidence that U.S. labor markets will continue improving, and gradually push inflation towards the Fed's 2 percent target.

Speaking at a meeting of African central bankers at England's Oxford University, Fischer did not directly address the timing of an initial Fed rate hike that is expected as early as September.

But he noted that the central bank needed to stay ahead of the curve, since monetary policy only affects the economy with a time lag.

"We should not wait until we have reached our objectives to begin adjusting policy," Fischer said in prepared remarks.

The gathering was meant to address problems particular to central bankers in Africa, and Fisher said the Fed was carefully weighing the possibility its upcoming shift in monetary policy could have significant effects on developing nations.

Rising global interest rates, for example, could make it more difficult for countries to finance development projects and infrastructure.

"In order to minimize the likelihood of surprises and thus avoid creating unnecessary market and policy volatility, we are striving to communicate our policy strategy clearly and transparently," Fischer said.

Since late last year the Fed has wrestled with whether a weaker global economy might throw the United States off track and force a further delay in any rate hike.

The escalating crisis in Greece could add to that uncertainty if it drags the euro zone back into recession.

Fischer did not mention the Greek crisis specifically. But he said the global situation remained a “significant headwind” for the United States.

It has hurt the country's exports in particular, and Fischer said the impact is likely to continue.

Still, Fischer's view of the economy remained one of steady improvement at a time when the Fed has said it would consider an interest rate hike at each upcoming meeting, and be responsive to incoming data.

Investors have steadily reduced the odds of a September rate hike, but upcoming reports - including unemployment statistics to be released Thursday - could prove central.

"Our policy will be data dependent, and the (Federal Open Market Committee) at upcoming meetings will weigh possible adjustments" to the interest rate, Fischer said.